India plans first tokenized bond issue in September

India is preparing to issue its first tokenized corporate bond as early as September 2026, marking one of the largest emerging-market experiments in bringing blockchain infrastructure to traditional debt markets.

The pilot, overseen by the Securities and Exchange Board of India (SEBI), will use distributed ledger technology to test faster settlements, automated coupon payments, and integration with the Reserve Bank of India’s wholesale digital currency, the e-rupee. For a country whose corporate bond market now exceeds ₹60 trillion (roughly $700B) in outstanding volume, even incremental efficiency gains could move serious money.

What SEBI is actually building

SEBI Chairman Tuhin Kanta Pandey first outlined the tokenization initiative in May 2026 during the CareEdge Debt Market Summit. The pilot is expected to run for six to nine months, long enough to stress-test smart contract automation under real market conditions without committing to a permanent overhaul.

The project isn’t trying to build a new exchange or create a parallel trading venue. Instead, it layers DLT on top of India’s existing depository infrastructure. Both of India’s central securities depositories, NSDL and CDSL, already have experience running distributed ledger systems. A 2021 SEBI circular had them deploy DLT to monitor secured debentures, so the technical foundation isn’t starting from scratch.

The more ambitious piece is the cash leg. SEBI is collaborating with the RBI to enable simultaneous transfer of securities and cash on-chain, a concept known in settlement jargon as delivery-versus-payment (DvP). If that works, it means a bond trade could clear and settle in near real-time instead of the current T+2 cycle, where two business days pass between execution and final settlement.

Two days might not sound like much, but in a market processing trillions of rupees in issuances annually (FY26 issuances reached approximately ₹9.11 trillion), that gap creates counterparty risk, ties up collateral, and generates reconciliation headaches that ripple through the entire financial system.

India’s corporate bond market sets the stage

India’s corporate bond market has been on a tear, growing from roughly ₹17.5 trillion in 2015 to its current ₹60 trillion-plus size.

The e-rupee connection

The integration with the RBI’s e-rupee framework is arguably the most consequential part of the pilot. Most tokenized bond experiments elsewhere still settle the cash side through traditional banking rails, which limits how much speed you actually gain. If India can execute both the securities transfer and the payment on distributed ledger infrastructure simultaneously, it leapfrogs the partial solutions that other jurisdictions have deployed.

The RBI launched its wholesale CBDC pilot in late 2022, initially focused on government securities settlement among a small group of banks. Extending that framework to corporate bonds would be a meaningful expansion of the e-rupee’s use case.

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